Question : The law of demand states that:
Option 1: if the price of a good increases, the demand for that good decreases
Option 2: if the price of a good increases, the demand for that good increases
Option 3: if the price of a good increases, the quantity demanded of that good decreases
Option 4: if the price of a good increases, the quantity demanded of that good increases
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Correct Answer: if the price of a good increases, the quantity demanded of that good decreases
Solution : The correct answer is if the price of a good increases, the quantity demanded of that good decreases.
According to the law of demand , there is an inverse connection between the price of an item and the amount wanted. The rule of demand is based on the assumption that customers have a limited budget and must make decisions about how to spend it. When the price of a product rises, buyers must spend more money to purchase the same amount of the product. As a result of having less money to spend on other things, customers will desire less of the item whose price has soared.
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